New Franchise Opportunities: Choosing the Right One for You

New Franchise Opportunities

Choosing the right one for you.

With a plethora of advantages to starting a franchise, your only hurdle may be determining which new franchise opportunities to choose from.

New franchise opportunities

In 2017, there were a whopping 745,290 franchises in the United States.

Those with entrepreneurial minds who don't want to go out on a limb and create a completely new business may want to add theirs to the list. And if you're interested in new franchise opportunities, how do you choose which one is right for you?

In this blog post, we'll discuss how to choose the franchise you'll succeed with. Franchises are a better bet for investment due to the fact that they come with a well-known brand. While that's already on your side, your franchise also has a higher rate of success if you pick a franchise that works for you.

Read on for more tips and tricks for choosing the best franchise for you to invest in.

1. Choose a Brand You're Passionate About

You may see that a certain brand of franchises is booming at the moment, but they're selling something you don't really know much about. What's more, you may not even have an interest in what they're selling, but you see the opportunity as a way to make money.

Instead, resist the urge for a high turnover of profits immediately in order to invest in a franchise you have a passion for. You'll succeed in the long run if you're doing something you love, and working with a brand you can stand behind.

2. Buy a Franchise That Has Lots of Support for Its Business Owners

While you should never purchase a franchise not knowing anything about business, you should have a strong support system from corporate. Discuss whether they have a strong backing for their franchisees, and how much support they actually give them.

Don't go for a franchise that leaves business owners flailing and wondering what to do next without the hope of help.

3. Pick a Franchise with a Good Reputation Among Franchisees

When looking for your next business opportunity, you may have been crushed to find out that your favorite chain restaurant doesn't work well with franchisees. Or, you may have found out that they've had incidents in the past and many unhappy business owners.

Don't then decide to franchise with them because you're loyal to the brand. While you can still remain a consumer of the brand, you'll want to ensure that corporate works well with people like yourself.

4. Choose an Affordable Investment

Depending on which franchise you buy into, you'll have to choose a franchise opportunity that doesn't blow through your budget. As a business owner, you don't want to spend everything you've got on the franchise fee. You'll need to take this on board when choosing the right brand to work with.

Taking Advantage of New Franchise Opportunities

Opening up a franchise is a big decision, but it can be incredibly exciting, and you'll want as much information as possible when you're just beginning. Here are 8 things you should know before buying a franchise.

Check out BizNexus Blog, which is all about new franchise opportunities to help you make the leap from searching for an opportunity to being a business owner.

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Tips for negotiating a term sheet in 2019

Tips Negotiating A Term Sheet in 2019

Term Sheet Covers The Major Aspect Of A Deal

A term sheet is a non-binding agreement outlining the basic terms and conditions under which an investment will be made. The term sheet acts as an outline for the parties involved so that once an agreement has been reached, a contract will be formed that adheres to the conditions defined in the term sheet.

A term sheet covers the major aspects of a deal, reducing the chances of a misunderstanding between parties. It also ensures that expensive legal fees attributed to drafting a binding agreement are not prematurely paid due to disagreements that arise. Here are some tips on creating an effective term sheet.

Numbers, Control, & Equity

The term sheet generally covers economic terms such as valuation and equity distributions to mitigate against a down-round or share dilution later. Things such as options or other equity incentives may be up for negotiation, as changes in options tend to change on a pre or post-money basis. It also covers matters pertaining to control and voting rights, as investors enjoy having influence over managerial decisions as a way to control their investment and future liquidation options.

It Goes Beyond Valuations

It is easy to focus all attention on the pre-money valuation in a term sheet, as that defines the financing strategy of the startup moving forward. However, other topics such as governance and control should be equally considered. Investors can put in clauses giving them preference for the sale of a company or the issuance of preferred stock, giving them greater leverage over their investment and control over the company’s major decisions.

Retrofit Your Term Sheet

Not every deal or investor will be the same, which is why it important to draft a term sheet that answers your specific needs, as well as those of the other party. Terms sheets are marginal, meaning that a win for you may mean a loss for the other party, vice versa. Hence, it is important to make sure that (1) you are aware and content with the terms laid out in your term sheet and (2) you leave room for changes or negotiation, as the term sheet is not the final contract, but a starting ground for securing your investment.

BizNexus -Learn More From Our YouTube Playlist:

BUSINESS ACQUISITION

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.